Goldman Sachs must be long GE 16 calls for DEC

noob_trad3r · Nov 18, 2009

http://www.streetinsider.com/Analyst+Comments/Goldman+Sachs+Recommends+Buying+GE+(GE)+Calls+Ahead+of+December+Events/5121285.html

They are telling the world the 16 call is a cheap buy at 60 cents.

"Goldman Sachs is telling client to buy GE (NYSE: GE) calls ahead of GE Capital and 2010 Outlook events. The firm is recommending buying GE Dec $16 calls for $0.60."

patchie · Nov 18, 2009

Maybe it is Buffett pumping the markets. He has a big stake in Goldman and in GE and he and Goldman just came to a deal to invest $500 Million together. Maybe in their discussion he asked Goldman for a favor.

KINGOFSHORTS · Nov 18, 2009

Why would Goldman announce to the world that it is a good idea to buy a wasting asset for 60 cents when there is 31 days left to trade. and the Call is only ITM by 5 cents so far.

Obviously the message is not to other professionals since the already have calculated if the risk is worth it or not.

And if GS thought GE 16 calls expiring this december are such a bargain that it represents free money, they would have kept quiet and gone long those calls.

Here is what I think. GS took a large long position in GE options and they need to unwind them on the lemmings.

That message was for Individuals who probably are loading up on those calls and will end up getting burned.

cleveland45 · Nov 18, 2009

Reminds me of their call to buy puts on the S&P in late February.

Why does anyone listen to these sycophants?

noob_trad3r · Nov 19, 2009

Whoever bought those calls on GS advice is losing big money today.

-22.58% loss in one day.

Vinny1 · Nov 19, 2009

Quote from noob_trad3r:

Whoever bought those calls on GS advice is losing big money today.

-22.58% loss in one day.

The lesson is always do the opposite from what they tell you to do.

noob_trad3r · Nov 19, 2009

Quote from Vinny1:

The lesson is always do the opposite from what they tell you to do.

Stock is down 2.62%
Option down almost 25%

10x leveraged loss and 30 days left to make it up

athlonmank8 · Nov 19, 2009

They've been making quite the name for themselves lately. So odd because the track record for their trading dept is almost impossible. Luckily for us they released this gold nugget of information.

KINGOFSHORTS · Nov 19, 2009

Goldman Sachs had no business making this public recommendation. All they did is screw a bunch of folks who probably did not know better.

The public has no real understanding about how options work and probably thought that 60 cents per contract was a good deal.

At least with the stock you can hold on to it and collect the dividends, buy more shares etc..

With Options time is not on your side and most folks probably loaded up thinking options trade in a simple directional fashion just like stock but cheaper outlay.

This is the first time I have seen this happen where a firm makes an all out recommendation on a specific option.

cleveland45 · Nov 19, 2009

Goldman has been doing the pump and dump for as far back as I can remember. Seems ET would have figured that out by now.

The most rotten, foul smelling of the bad potatoes.